Frequently Asked Questions
What is the purpose of the committee?
The Advisory Committee on Socially Responsible Investing, which includes representatives of the Board of Trustees, the faculty, and undergraduate and graduate students, serves as a forum in which matters relating to the investment holdings and practices of the University can be considered and discussed in a civil and in-depth manner. According to the committee’s charter, members are expected to be knowledgeable about relevant socially responsible investing issues so that they can engage in informed, thoughtful, and collegial consideration and discussion. As a standing Trustee committee, the group will provide continuity and institutional memory on relevant policy issues. Members will communicate with their constituencies about such issues, and the committee will make recommendations to the Board of Trustees.
Why was the committee formed?
The Advisory Committee on Socially Responsible Investing was created by the President and the Board of Trustees to provide an orderly process for reviewing requests to the University that it consider specific socially responsible investment issues raised by members of the community, and to provide a formal channel that can bring summaries and recommendations on such issues to the Board of Trustees. The Trustees, acting proactively and not in response to a particular issue, formed an Ad Hoc Committee on Socially Responsible Investing, which met over the course of a year to develop a draft charter. The Trustees approved the charter in April 2013. It is expected that the committee will be a dynamic entity, the focus of which will evolve over time in response to changing issues.
Who serves on the committee?
The committee includes three Trustees, three members of the faculty, two undergraduate students, and one graduate student. In addition, the University President and the Dean of Students serve as ex officio, non-voting members. Additionally, the University’s General Counsel and Chief Investment Officer (or their designees) will serve as administrative liaisons. View a list of current committee members.
How are members selected?
The three Trustee members will normally be members of the Investment, Student Affairs, and Audit Committees, respectively. The Board of Trustees Governance Committee selects the Trustee members and designates the chair of the committee. The faculty members will be the current Faculty Council chair (or his or her designee), the Faculty Council chair-elect or the immediate past chair when there is no chair-elect (or if neither is able to serve another representative approved by the Faculty Council), and a third representative approved by the Faculty Council. The undergraduate student members will be approved by the Student Government. The graduate student member will be approved by the Arts & Sciences Graduate Student Organization.
How long can members serve on the committee?
Members are subject to term limits, based on governance best practices, which reflect the typical time span and availability of members of the three groups that make up the committee. For Trustees, the limit is six years; for faculty, four years; and for students, three years. An individual who has reached his or her term limit is subject to a one-year waiting period before being eligible to rejoin the committee.
When does the committee meet?
Meetings will be called by the chair on an as needed basis and whenever possible, committee meetings will coincide with Board of Trustees’ meetings in order to facilitate Trustee participation. However, the committee will meet at least annually in late November or early December; this is in line with the schedule of Trustee meetings and is a time when students and faculty are on campus.
Are meetings of the committee open to the public?
Meetings of the committee are closed in order to foster free-flowing discussion among members and to allow for the discussion of confidential information. All members of the committee must file a conflict of interest disclosure form and agree to abide by the Board’s confidentiality policy that applies to all Trustee and non-trustee members of any Trustee committee. The chair can invite members of the University community or experts on relevant issues, as appropriate, to attend. The chair also can call an open meeting, when helpful to the deliberations of the committee and of benefit to the community.
Does the committee need a quorum in order to meet?
Yes. A quorum is a simple majority (five of the nine members), but with the additional requirement that at least one member of each of the three groups represented on the committee (Trustees, faculty, and students) be present. A member who is not able to be present may participate via conference call.
What is the process for voting on an issue?
The voting protocol mirrors the quorum protocol: a decision is determined by a simple majority, with the additional requirement that at least one member of each of the three groups represented on the committee must be included in the majority.
How will the committee decide which issues to consider?
The committee will be responsive to the Boston University community and will monitor the socially responsible investing environment, recognizing and considering emerging issues over time. As individuals and groups make recommendations to the University administration and Trustees regarding investment-related issues, these topics will be reviewed for possible referral to the committee for discussion.
What are the requirements for an issue to be considered by the committee?
In order to ensure due consideration and process, proposals to be considered by the Advisory Committee must be submitted in writing to the chair prior to a committee meeting. Additionally, no vote will be undertaken during the meeting at which a motion or proposal is first presented.
How do I contact the Advisory Committee on Socially Responsible Investing and/or submit an issue for the committee to consider?
Any member of the Boston University community can contact the committee and/or submit a topic for consideration by the ACSRI by emailing (a) either their representative on the committee, or Committee Chair Richard Reidy, or ex-officio members President Brown or Dean Elmore (all email addresses available on the list of current members); or (b) the Secretary of the Board of Trustees (Todd Klipp) through firstname.lastname@example.org.
What is the first issue to be considered by the committee?
At the request of the Trustees, the committee will consider the question of whether or not the University should establish a permanent policy to divest holdings it might have in companies that manufacture firearms for the civilian market in the United States, and to avoid any such investments in the future. View information on this issue.
Why was this issue selected?
In February 2013, the Trustees formed a Working Group on Investment in Civilian Gun Manufacturers to consider the question of whether or not divestment might be an appropriate action. At that time, the Trustees were also creating the Advisory Committee on Socially Responsible Investing (ACSRI). The Working Group chose to refer the question to the ACSRI, once it was formed, to review the issue and offer a policy recommendation. In the interim, and based on the Working Group’s recommendation, the Trustees directed that the University should make no new direct investments through its endowment in manufacturers of firearms for the civilian market.
What is an endowment?
An endowment is a fund of money built up over time through (1) gifts and bequests to an institution and (2) the investment return earned on them. Endowments have two important characteristics. First, those responsible for managing an endowment are obligated to ensure that endowment withdrawals to support the operating budget are expended in accordance with the original donors’ intentions because they made their gifts for specific purposes. For example, at Boston University, some donors make gifts with the expectation that the investment return will support a program (such as a named professorship) while others want to support financial aid for deserving students or help take care of a new building. The second characteristic is an expectation that an endowment will endure in perpetuity. To accomplish this, an endowment’s assets must generate an investment return that will allow the real purchasing power of an endowment to stay the same size or grow over time. More specifically, to balance equally between present and future generations of beneficiaries, the value of an endowment must be maintained (after being adjusted for the effects of inflation and spending withdrawals to support operations). At Boston University, the Board of Trustees, acting through its Investment Committee, has the fiduciary responsibility to oversee and manage the endowment prudently and in good faith.
Has Boston University ever divested holdings in its endowment?
The University has voted at least twice in the past to divest holdings in protest of corporate support for governments deemed to be violating human rights. In 1979, the Trustees voted to enact a policy that: prohibited the deposit of funds in banks that made loans to the government of South Africa; divested all nonvoting holdings in companies doing business in South Africa; and called for selective divestment by endorsing the sale of stock in any company doing business in South Africa that allowed for discrimination under that country’s apartheid laws. This policy was based on the Sullivan Principles, which were issued in 1977 as a guide to responsible corporate behavior for companies doing business in South Africa. In 2006, the Trustees voted to divest any and all direct investments in companies that had direct business ties to the government of Sudan or whose business activities offered support to the Sudanese government, as well as to ban future investments in companies known to support the Sudanese government.
Historically, what standards were considered in making a recommendation to divest?
In the most recent precedent—the decision to divest in companies with ties to Sudan, in 2006—it was noted that a divestment action should be considered rarely and only in the face of human suffering that is wholly inconsistent with the moral and ethical values of Boston University. In the 1979 discussion around the decision to divest in South Africa, it was noted that the “selective purchase and sale of securities based on consideration broader than economic return was already a de facto policy of the University.”